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During February the Luqman Manufacturing Company's costing system reported several variances that the production manager was surprised to see. Most of the company's monthly
During February the Luqman Manufacturing Company's costing system reported several variances that the production manager was surprised to see. Most of the company's monthly variances are under Rs.225, even though they may be either favorable or unfavorable. The following information is for the manufacturing of garden gates, its only product: 1. Direct materials price variance, Rs.900 unfavorable. 2. Direct materials efficiency variance, Rs. 1,900 favorable. 3. Direct manufacturing labor price variance, Rs.4,100 favorable. 4. Direct manufacturing labor efficiency variance, Rs.700 unfavorable. Required: (a) Provide the manager with some ideas as to what may have caused the price variances. (b) What may have caused the efficiency variances?
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